From a fundamental point of view, EurUsd has entered a very special area that could allow the greenback to rise to the top. Over the past 10 years, infact, in terms of purchasing power parity, when the underestimation of the dollar against the euro has come to touch a percentage of at least 12%, a peak for the greenback was in the air. With the exception of 2005, when  the underestimation of the dollar compared to the theoretical purchasing power parity came to -6%,in all other following cases the  percentages ranging between -10% and -12% have always intercepted the low of EurUsd and the upper graph confirms this. Last week we touched again the fateful -12% and this should at least turn on a red light in the dashboard of the investors.

There is still an important technical fact: as the week closed above the key support of 1.2680 (61.8% of the rise from 1.204 to 1.371), this in fact still keeps open the chance of attending a recovery of the single currency in the coming weeks  (Graphic source: Bloomberg).